Connected Cars: Scope, Investment and Reach

Last week, on Sunday, General Motors’ CEO Mary Barra announced that it will introduce the first car in next two years that can communicate with other vehicles, in order to help avoiding accidents and roadblocks. Already, Google is working to develop its fleet of fully automated cars and Apple will soon be offering its ‘Car Play service’, which will offer apps from third-party companies that have been optimized for the car.

Sounds like a news from some other world?

Well, it’s not. This is the world of connected cars- built to suit the needs of today’s digital population. For those, who wanted something beyond basic radio and navigation system, which can sync with all their devices – iPad, smartphones and more.

Also, recently a demonstration was made with an An Acura RLX sedan, owned by Honda Motor, showing the ‘Virtual Tow’ mode where one car, follows the instructions beamed over by the other and follow it as if being towed away without physically attaching with it.

Also, since the concept has gained hype, many demonstrations have already been done in various auto shows, marketing the upcoming technology. The Los Angeles Auto Show in 2013, formation of Open Automative Alliance by Google, Android Auto, etc, were few of the many initiatives taken by the corporates, to construct the future of the connected cars.

According to researcher IHS Automotive, the number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now. Thus, gaining the attraction of both venture capital and corporate investors.

A recent study by CB Insights also highlights that since 2009, the deals in connected cars space has increase approx. 4 times.

But, do they really connect with masses?

As per the recent polls conducted under the 2014 Harris Poll AutoTechcast Study, 44% of the people were not even aware of connected cars, 42% have heard, but were not aware of the capabilities while only 14% were there who said that they completely know about them. Also, people showed concerns regarding privacy breach and complexity of the systems.

However, the marketers seem to be completely positive about its success. “Once people start marketing, demand takes off. The time is now to really start to do this,” said Ian Beavis, executive vice president of global automotive for Nielsen.

This, although clears one thing well – connected cars will take time to evolve. It could be a case like smartphones which became a necessity for all in last few years. Or it could be similar to the fate of Google Glass which is still struggling to be a part of the people’s daily lives.